Is Bankruptcy a Good Option for a Senior Citizen with Extensive Medical Debts?

One of the unfortunate realities of life is that, as we age, our bodies start to break down, requiring more medical care. For many senior citizens, the costs of medical care are the single greatest financial burden. With often limited access to health insurance, many seniors have racked up substantial medical debt. That debt can be discharged in a Chapter 7 bankruptcy proceeding, but is that a good option for most elder Americans?

Will You Need More Medical Care?

While a bankruptcy filing can help tremendously, it’s critical to understand that, particularly when you file a Chapter 7 petition to discharge debts, that the bankruptcy only affects those debts you have at the time of filing. If you still need extensive medical treatment, any bills you incur after the bankruptcy filing won’t be covered. If the prognosis is for a full or substantial return to health, you’ll be better served by waiting until most or all of your treatment is complete.

Can You Protect Your Assets?

You may also be concerned about whether you’ll lose property in a bankruptcy filing. The good news—retirement plans are generally exempt from bankruptcy, so you won’t have to liquidate retirement plans to satisfy creditors.

With respect to your home, though, you need to be careful. There’s a homestead exemption in every state, which protects a certain amount of the equity in your home. If you choose to reorganize your debts under Chapter 13, there’s really no risk of losing your home. But if you have significant equity in your home, or own it free and clear, there is a risk that the homestead exemption won’t be enough to allow you to keep your home.

Contact Heath, TX Bankruptcy Attorney Carrie Weir

I offer a free initial consultation to all potential bankruptcy clients. Contact my office by e-mail or call me at 972-772-3083 for a private meeting. With offices in Rockwall, Texas, I represent clients in Heath, Greenville, Lavon, Wylie, Mesquite and Rowlett.